Review of Behavioral Economics > Vol 11 > Issue 1

Maze-Runners: Sentiment and Bank Deposit Growth: Evidence from the UK

Mohamed Sherif, Business School, Cairo University, Egypt, mohamed.sherif@foc.cu.edu.eg , Mohamed Elsharkawy, Business School, Cairo University, Egypt, Audrey Paterson, University of Aberdeen Business School, UK
 
Suggested Citation
Mohamed Sherif, Mohamed Elsharkawy and Audrey Paterson (2024), "Maze-Runners: Sentiment and Bank Deposit Growth: Evidence from the UK", Review of Behavioral Economics: Vol. 11: No. 1, pp 123-150. http://dx.doi.org/10.1561/105.00000182

Publication Date: 22 Feb 2024
© 2024 M. Sherif, M. Elsharkawy and A. Paterson
 
Subjects
Behavioral finance,  Financial markets,  Financial services
 
Keywords
JEL Codes: G01, G02, G21, G30
Managerial sentimentstock marketinterest ratesUK banks
 

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In this article:
1. Introduction 
2. Theoretical Background 
3. Data, Models, and Methodology 
4. Descriptive Statistics and Empirical Findings 
5. Conclusion 
References 

Abstract

This paper investigates the relationship between household, managerial and economic sentiments, and bank deposits. Using UK monthly data from January 2000 to February 2018 and a sample of consumer, industrial and economic confidence indicators provided by the European Commission, this paper provides novel evidence on how sentiment affects the deposit growth and interest rates in the UK. In addition, this paper finds robust evidence regarding the impact of managerial sentiment on bond rates, LIBOR rates, and corporate deposit growth, implying that managers’ sentiments play a significant role in determining the level of business’s savings. It is also reported that household sentiment plays a significant role in shaping the households deposit growth. Moreover, economic sentiment is shown to affect the deposit growth of both households and institutions.

DOI:10.1561/105.00000182